Spot gold had ticked up 0.1 percent to $1,063.80 an ounce by 0613 GMT, after a 1.1-percent slide on Monday.
Advertisement
Elsewhere in metals trading, copper fell from a two-week high on Monday, as a broadly stronger US dollar reduced the appeal of the red metal, but losses were limited following the release of better than expected Chinese economic data over the weekend.
With US interest rates widely expected to rise on Wednesday after the Fed concludes its two-day policy meeting, gold could be poised for further downside and new multi-year lows. Gold has already slid 10 percent for the year, its third straight annual decline, in anticipation of higher rates. That was a day after prices tumbled toward a six-year low under $1,054 on December 2. “Gold continues to weaken as investors await this week’s FOMC”, ANZ analysts said in a note, referring to the Federal Open Market Committee. And traders and analysts expect further declines.
Pure gold (99.9 purity) also moved by a similar margin to settle at Rs 25,495 per 10 grams as against Rs 25,380 earlier. The precious metal has been trading in a narrow range just above a six-year low as traders are keeping to the sidelines.
Part of the problem is the drop in oil prices, which has made it a more attractive inflation hedge, as MarketWatch’s Myra Saefong and Barbara Kollmeyer report.
In the wider markets, the dollar edged higher against a basket of major currencies, limiting gold’s uptick. Gold prices in India swung to a discount for the first time in a month on Monday as jewellers and dealers in the world’s second-biggest consumer postponed purchases ahead of the Fed meeting. Other precious metals were weak, with silver falling to the lowest since August 2009 at $US13.76 per ounce.
Advertisement
The ratio peaked at 101 ounces of silver per 1 ounce of gold in February 1991, and hit its lowest level in more than 3 decades – with silver more highly valued against gold – at 31.5 in April 2011.
